Investors rushed for the relative safe haven of mining and oil stocks this morning as the market digested the details of Royal Bank of Scotland's £12 billion rights issue and replacement of its cash dividend with a scrip dividend.

Commodities stocks made up nine of the twelve highest risers in FTSE 100 index of blue-chip companies. Eurasian Natural Resources topped the risers, up 63p to £12.69, followed by Cairn Energy, up 74p to £30.89, Rio Tinto, up 120p to £63.57, Tullow Oil, up 13p to 734p, and Antofagasta, up 12p to 814p.

Fears that other banks would follow the lead of RBS, down 13p to 360p, and opt for all-share dividends instead of cash hit the share prices of HBOS, down 23.5p to 516.5p, and Barclays, down 22.5p to 456p.

The FTSE 100 edged up 3.3 points to 6,058.6.

Worries also spread that the share dividend strategy may be followed by other companies seemingly offering high yields on their stocks but which, like the high street lenders, are heavily reliant on the health of the housing market.

Persimmon, the only housebuilder in the FTSE 100, was one of the index's sharpest fallers, down 31p to 668p. The company is also due to update on trading at its annual meeting on Thursday. Last week Taylor Wimpey, down 5 1/2 per cent today to a long-time low of 151p, gave warning of a further deterioration in its UK order book.

Barratt Developments, which is second only to Taylor Wimpey in the number of homes it sells in the UK each year, fell 15 1/4p today to 350p. Barratt is trying to sell a construction business it acquired as part of last year's a£2.2 billion acquisition of Wilson Bowden to reduce its debt mountain. Gearing stands at about 60 per cent.

Shares in Associated British Foods, the sugar producer and Primark discount clothing retailer, fell 22p to 868p, despite a 9 per cent rise in first half pre-tax profits. The company said that it expected profits to show "progress" in the second half but gave warning of difficult economic conditions for all its markets.

FKI, the diversified engineering company, today recommended a cash-and-shares offer from Melrose worth 81 1/3p a share, valuing the company at £478 milllion. The offer is a premium on FKI's closing price yesterday of 50 1/2p. FKI rose 5 3/4 per cent to 83 1/2p.

FKI was the subject of a bid approach last summer — believed to have come from Blackstone Group, the private equity firm — worth about 130p a share that would have valued the company at about £764 million.